Wells Advance LLC v. Carpenter

Background

Wells Advance LLC was the plaintiff, and Nicole L Carpenter was the defendant. Carpenter removed the action from state court to federal court, relying on diversity jurisdiction. Diversity jurisdiction generally requires the parties to be citizens of different states, and the citizenship of a limited liability company depends on the citizenship of all its members.

On November 28, 2022, the court ordered Carpenter to supplement her removal notice with the citizenship of each party, including Wells Advance’s members. Carpenter submitted additional materials on December 5. On December 6, the court found those materials insufficient and gave her another opportunity. Carpenter submitted a further response on December 9.

Court’s Analysis

Carpenter acknowledged that, after searching publicly available information, she could not determine the names of Wells Advance’s members or owners. She argued that identifying all members was difficult and that the members did not appear to share a state with her. The court explained that the party invoking federal jurisdiction bears the burden of affirmatively establishing it. Because Carpenter had not established Wells Advance’s citizenship, she had not established complete diversity.

The court also found that Carpenter had not properly established her own citizenship. Her removal notice said she was an adult with an address in Texas and therefore a Texas citizen. Her December 5 submission said she was a citizen and resident of Arizona. Her December 9 submission again identified Arizona, while her affidavit stated that she moved to Texas at the end of February 2022 and to Arizona in October 2022. The case was filed in state court on October 24, 2022, and removed on November 23, 2022. The court stated that Carpenter needed to allege her citizenship on both dates but had not done so.

Ruling

The court granted in part Carpenter’s request for jurisdictional discovery. It ordered the parties to complete brief, limited discovery consisting of document requests and interrogatories sufficient to identify the names and citizenship of all Wells Advance members, including members farther down the ownership chain. Carpenter must file an amended removal notice listing that information by December 20, 2022. The court cautioned that, because this was her third opportunity to properly allege complete diversity, she should not expect an extension.

The opinion did not decide whether complete diversity actually exists. It addressed whether the federal court had enough information to determine its subject-matter jurisdiction, so this was a procedural order rather than a decision on the underlying dispute.